Proposed expansion of Johor-Singapore SEZ to include Indonesia’s BBK islands may boost investor appeal
A new vision for Southeast Asia’s economic future is taking shape as Singapore, Johor, and Indonesia’s Riau Islands explore deeper integration. The goal: to enhance the Johor-Singapore Special Economic Zone (JS-SEZ) by reviving the Sijori Growth Triangle and leveraging collective regional strengths.
Ministers Call for Trilateral Economic Revival
During the 9th Asean Conference in Singapore, Trade and Industry Minister Gan Kim Yong suggested incorporating Indonesia’s Batam, Bintan, and Karimun (BBK) islands into the Johor-Singapore Special Economic Zone. He stressed that “three is better than two” when referring to regional cooperation among Singapore, Johor, and the Riau Islands.
This vision aligns with the original 1994 formation of the Sijori Growth Triangle, created to merge Singapore’s infrastructure and capital, Johor’s workforce and land, and Riau’s resources and lower costs into a cohesive investment magnet.
JS-SEZ Already Proving Its Worth
Officially launched in January 2024, the JS-SEZ has already attracted significant interest. In Q1 2025 alone, it contributed to 90% of Johor’s RM27.4 billion (US$6.5 billion) in foreign direct investment, according to Malaysian Trade Minister Zafrul Abdul Aziz.
Key industries targeted within the zone include pharmaceuticals, electronics, aerospace, and chemicals. Financial institutions like UOB and OCBC have committed a combined RM22.5 billion in financing to fuel business expansion in Johor.
Indonesia’s Role: Strategic and Timely
Indonesia’s Deputy Minister for Investment Cooperation, Tirta Nugraha Mursitama, supported the idea of deeper collaboration. Including BBK in the JS-SEZ model would not only revive Sijori but potentially balance regional growth and reduce dependency on any single economy.
Bringing Indonesia into the fold adds scale, resources, and cost advantages for investors, particularly in manufacturing and logistics, sectors heavily impacted by global supply chain shifts.
Asean’s Bigger Economic Strategy
Amid growing US protectionism, with steep tariffs expected from July 9, Asean nations are turning inward for strength. Minister Gan emphasized that Asean must strengthen internal cooperation and digital harmonization to withstand external shocks.
Malaysia’s Deputy Trade Minister Liew Chin Tong echoed this, encouraging Asean to focus on building local giants and fostering technological innovation instead of over-relying on foreign investment.
Business Support Is Scaling Up
Singaporean banks are stepping up. UOB and OCBC are accelerating cross-border capital flows and offering dedicated green lanes to fast-track SEZ-related projects. With RM10 billion in FDI facilitated by UOB alone and more to come, regional integration is being backed by real capital.
These efforts are complemented by improved digital standards, QR payment interoperability, and joint smart city projects across Asean, signalling a pivot towards seamless intra-regional trade.
The proposal to bring Indonesia’s BBK islands into the Johor-Singapore Special Economic Zone could redefine regional economic dynamics. For Indonesians and Singaporeans alike, deeper integration within the Sijori Growth Triangle offers vast opportunities—from manufacturing and logistics to tech and finance. As Asean navigates rising global protectionism, enhanced regional cooperation may be the key to long-term resilience and shared prosperity.
Sources: South China Morning Post (2025) , Straits Times (2025)
Keywords: Johor Singapore SEZ, Batam Bintan Karimun, Sijori Triangle, Foreign Investment, Asean Growth, Regional Trade
